Chipotle Mexican Grill, Inc. (CMG), Buffalo Wild Wings (BWLD), And The Top Value Plays In This Space

Chipotle is suggesting same-store sales will be flat to up by the low single-digits. Buffalo Wild Wings (NASDAQ:BWLD) and Starbucks Corporation (NASDAQ:SBUX) are both guiding that same-store sales will increase by the mid-single digits. Panera is saying same-store sales should be up by 4% to 5%. The company’s tie for the lead in an impressive peer group is a strong vote of confidence for the shares.

Among their competition, Panera also carries the second best operating margin. The only company that offers a better margin is Starbucks at 15.3%. However, Starbucks has a competitive advantage that their main product is coffee, which is higher margin, whereas Panera’s main product is food. Of their more food based competition, Panera’s margin of 13.58% beats Chipotle Mexican Grill, Inc. (NYSE:CMG) at 13.4%, and crushes Buffalo Wild Wings (NASDAQ:BWLD) at 7.2%.

A Reasonable Value
While it’s hard to suggest that Panera Bread Co (NASDAQ:PNRA) is cheap at current prices, given the company’s competitive position, it’s hard to argue that the shares are relatively expensive either. When comparing companies that pay dividends with those that do not, I use the PEG+Y ratio. This ratio takes into account a company’s yield and their growth rate, and then compares the total to the projected P/E ratio. With this ratio, the higher the number, the better the value.

To put this fully in perspective, let me show you how Panera compares to its competition:

As you can see, though Chipotle Mexican Grill, Inc. (NYSE:CMG) is expected to grow faster than Panera Bread Co (NASDAQ:PNRA), the stock is priced much higher. While Starbucks Corporation (NASDAQ:SBUX) pays a dividend, and has a competitive growth rate, the stock’s higher price more than reflects its value. Buffalo Wild Wings (NASDAQ:BWLD) would seem to be a slightly better value, but the company’s results have been wildly (pun intended) inconsistent, having missed earnings estimates in three of the last four quarters.

Panera’s business offers fast growth, good margins, and strong same-store sales. When you combine these traits with consistent performance, you have a recipe that may help investors bake up more gains in the future.

The article The Best Value Among These Fast Growing Companies originally appeared on Fool.com and is written by Chad Henage.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.